I wrote this post about two years ago, but its message and lessons are as relevant today as they were back then:
The economy continues to do okay, the stock market is hitting all-time highs every day, real estate is back on the up and up, interest rates remain very low by historical terms, the net worth of Americans is back at all-time highs, we’ve just dragged ourselves out of the worst recession in 80 years, but people are still upset about a lot of things. I guess that’s to be expected in an environment with 7.6% unemployment. That’s not exactly a happy number. But I have a feeling that there’s more to this general unhappiness than meets the eye. And I think a lot of people are mad because the fear case has totally lost out at this point.
If you’ve been paying attention over the last few years, you probably remember how many people predicted hyperinflation, surging bond yields, soaring gold prices, a cratering US Dollar and a collapsing stock market. This was the fear trade. You overweight gold, short US government bonds, short the USD, short equities and laugh all the way to the bank. Parts of that trade have worked out OKAY (like the gold portion over the years), but on the whole that trade has been a big disaster. In other words, fear lost out – again. And I think a lot of people who bought into the fearmongering nonsense are angry. They’re angry because they backed their political beliefs with their wallet. They’re angry because they listened to so-called “experts” peddling their political beliefs as an understanding of the monetary system. They’re angry because they read scary websites that claim to have predicted the crisis, but have gotten almost everything wrong since 2008. They’re angry because they let their emotions get in the way of sound analysis.
Look, there’s plenty to be upset about.
I am not here to claim that all is well in the economy and in the USA. In a lot of ways this country feels as disjointed as ever. But I see a lot of people who seem to be upset for reasons that can be pinpointed to little more than their ideological beliefs. If I am right then these people have no one to be upset at but themselves for constantly buying into this fearmongering nonsense. You have to be very careful approaching the monetary system and the economy with an ideological or political bent. It will lead you astray at times. I know it has certainly led a lot of people astray in the last 5 years….
The good news is it’s never to late to learn from mistakes. I’ve made plenty of mistakes over the last 5 years. But I always try to learn from mistakes. So the question is, will people actually try to approach the monetary system and the economy objectively, rationally and apolitically? Or will they continue to expose themselves to the same biases and ideological pitfalls that have led so many people to fall for the fear trade?
How Fear Blocks Sales Success
Are Your People Struggling With Innovation?
Why Your Investing Lifetime is So Important
The Fascinating Questions of a 100 Year AI Life
The Number of Americans Who Feel They Will Be Better off in a Year Is at a Record High
5 Ways M&A Can Hurt Your Brand
The Enormous Impact of Company Culture on Business Growth
Confronting the Ghosts of Your Financial Past for Future Control
5 Attitudes to Enhance Aging
One Rarely-Used Strategy to Push Your Sales Copy Over the Top
Equities22 hours ago
The Bulls Are Getting Stronger
Markets22 hours ago
S&P 500? More Like The S&P 50
Development22 hours ago
5 Questions Prospects May Ask Before Deciding to Hire You as Their Advisor
Let's Solve It2 days ago
Is Inflation Really Dead?
Markets2 days ago
Could Cyclicals Make a Comeback in 2019
Equities2 days ago
US Technology Sector is Setting Up for A Momentum Breakout Move
FinTech4 days ago
The Next Global Financial Meltdown Is Just Around the Corner
Advisor4 days ago
Stay Away From Dumb Money: The Crowd Is Rarely Right